King County medium housing price as of August 2007 is now $477,345

Forum lesson number one: don’t expect a challenge to someone’s data to be taken seriously based on a post where you reference the “medium” house price. LOL

The funny thing is that most MSM artictles talk about everything in nominal terms. If prices were expressed in a per unit adjusted manner, this wouldn’t be a problem.

Have the building of large square footage McMansions added to an increase in median home prices? Certainly!

If you want a realistic look at the increase in home prices over the last few years, then you would need an inflation adjusted comparison of $/sq. ft to median household income, which is not something you see very frequently in the MSM. Shiller’s indices (which take into account such things) have done a good job in showing that home prices have indeed reached bubbilicious proportions.

How long a return to fundamentals will take is anyone’s guess though. Very likely it will be months before a real trend is observed in Seattle. Until then, we will be forced to listen to how much this area of the country is different.

I agree. That’s why I made sure to point out that these kinds of trends in September are not an uncommon occurrence. This drop is larger than most others have been, but I don’t intend to make a big deal about price stagnation or drops until/unless it happens in the spring.

What’s most interesting to me now is the surging inventory and plummeting sales.

Great blog. Have been lurking for a while.

It may be a bit premature to make much of the price dip. According to ZipRealty, while the median price declined, the $/sq. ft. increased in August. This would indicate that the median price decline is simply a result of smaller homes being sold.

I hope that the overall trend is down, as I want to buy a house in the next couple years, but as of now, it is too early to say whether or not a peak has been reached.

The lemmings are watching the fundamentals collapse and are figuring the FED will lower rates.
Perhaps if the fundamentals point to a devastating depression, the markets will sky rocket. That seems to be the logic behind the recent market action. I expect a major market correction in the very near future.

If the FED does lower rates I still see a collapse for housing nation wide. The coming recession and the recently issued guidance on exotic mortgages along with low affordability will put a pinch on the first time homebuyer. The ripple effect will dampen all housing activity even more than its current anemic state.

The recent run to commercial construction will also be short lived. All the new warehouses being built to accommodate cheap imports will be sitting empty once the economy unravels.

It appears that the market investors are drunk at the hurricane party.
The FED may bring some more punch to the party, but the hurricane is on the doorstep and the wind begins to howl.

Kendra is just the local version of CA’s Leslie Appleton-Young. And like LAY Kendra will have to eat crow soon also.

But of course the newspapers will figure some way to put a happy face on it…..until they are forced to face up. Then they will instantaneously jump sides and they will be all smug in the “we told you all along camp”.

You can count on the above…its “in the bag”.

September-05 16.78%
October-05 20.34%
November-05 14.75%
December-05 17.01%
January-06 17.33%
February-06 11.29%
March-06 12.32%
April-06 17.08%
May-06 16.88%
June-06 15.34%
July-06 14.71%
August-06 12.02%
September-06 8.60%

And gee from Sept to Aug the PRICE dropped 392K to 380K in King County a drop of 3% IN ONE MONTH and effectivly getting rid of the appreciation since April. Lets see them spin this positive….I know they probably will resort to YOY numbers instead of pointing out the undeniable trends but SHAME ON THEM IF THEY DO!

Tim, Thanks for the actual pdf data and analysis.

Amit

The DOW Jones has hit a record high because investors are betting on a soft landing.

Why no doom and gloom for investors?

I concur there Tim. You can spin stats any which way but loose, and the “still strong” housing market mantras followed up by “robust job-growth, blah, blah, blah” will be the stock quotes of the day. I’m sure we’ll hear the typical “While the rest of the country…” and “we’ve managed to escape the worst of it…” nonesense. The thing is, I’ve noticed Seattle press is about 1/2 yr. to a full yr. behind the curve. We’re currently hearing the “soft landing” arguement, something the national press has long since abandoned.

But again, if you look at numbers, you can get the YOY camel hump affect. YOY, while a decent timelime for real estate in long term doesn’t capture mid-year surges. Prices can be crashing, but a YOY +% increase won’t capture the plummeting affect. Who knows, prices may’ve been up 30% YOY just last month, but you wouldn’t know it…

I predict that the local papers will focus most of their articles on the fact that there is “still double-digit appreciation,” and that they will claim that any signs of a slowdown are merely standard seasonal slowing.

I hope to be proven wrong.